Question: On January 1, 2019, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and 5 GB data wireless plan. Required: 1. 2. Calculate the transaction price for the smartphone and unlimited talk and 5 GB data wireless plan assuming that Loud allocates consideration based on stand-alone prices. Record the initial journal entry for Loud Company's sale of a 2-year contract on January 1, 2019, and the monthly journal entry.
Question: On January 1, 2019, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and 5 GB data wireless plan. Required: 1. 2. Calculate the transaction price for the smartphone and unlimited talk and 5 GB data wireless plan assuming that Loud allocates consideration based on stand-alone prices. Record the initial journal entry for Loud Company's sale of a 2-year contract on January 1, 2019, and the monthly journal entry.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 14EB: Anderson Air is a customer of Handler Cleaning Operations. For Anderson Airs latest purchase on...
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![Question:
On January 1, 2019, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless
plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone
and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and
5 GB data wireless plan. Required:
1.
2.
Calculate the transaction price for the smartphone and unlimited talk and 5 GB data wireless plan assuming that Loud
allocates consideration based on stand-alone prices.
Record the initial journal entry for Loud Company's sale of a 2-year contract on January 1, 2019, and the monthly journal
entry.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F09d353d7-e49b-495e-8eed-b5b9eb8ebcdc%2F217227c1-b6a9-45c2-aa98-a120767d3b1f%2F4gr6diq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question:
On January 1, 2019, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless
plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone
and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and
5 GB data wireless plan. Required:
1.
2.
Calculate the transaction price for the smartphone and unlimited talk and 5 GB data wireless plan assuming that Loud
allocates consideration based on stand-alone prices.
Record the initial journal entry for Loud Company's sale of a 2-year contract on January 1, 2019, and the monthly journal
entry.
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